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Late Climb Lifts Wall Street

Robert Holmes

Stocks had a choppy session but found their footing late Monday and closed higher, spurred on by another round of merger news and lower oil prices.

The Dow Jones Industrial Average rose 42.30 points, or 0.34% to 12,318.62. The index had spent much of the day near the flat line, and earlier was down as much as 30 points.

Nineteen of the Dow's 30 components finished in the black, led by gains of 1.9% or more in Intel (INTC Quote) and Boeing (BA Quote).

Meanwhile, the S&P 500 ended up 3.75 points, or 0.27%, at 1406.60, and the Nasdaq Composite added 14.74 points, or 0.62%, to 2402.29.

Roughly 2.57 billion shares changed hands on the New York Stock Exchange. Advancers beat decliners by a 5-to-3 margin. Volume on the Nasdaq reached 1.60 billion shares, with winners outpacing losers 9 to 7.

Market subsector winners included the Amex Airline Index, which was higher by 1.3%. The Philadelphia Semiconductor Sector Index rose 0.9%, and the S&P Retail Index tacked on 0.5%.

Among losers, the Philadelphia Housing Sector Index fell 2.2%. The Amex Oil Index slid 0.4%, and the Philadelphia/KBW Bank Index dipped 0.1%.

"The market 'shake-up' of the past couple of weeks has done little to the top industry groups," said Paul Nolte, director of investments with Hinsdale Associates. "We expect there may be more declines ahead that are likely to force money from the top-performing sectors toward the bottom. It has happened repeatedly in the past, and we expect the future to at least rhyme."

As is often the case, the new week started with the announcement of several takeover deals. The biggest will see New Jersey's Schering-Plough (SGP Quote) pay $14.5 billion for the Organon BioSciences unit of the Netherlands' Akzo Nobel (AKZOY Quote). Schering-Plough added 10 cents, or 0.4%, to $23.95.

Staying in the health care sector, UnitedHealth (UNH Quote) will acquire Sierra Health Services (SIE Quote) in a deal worth $2.6 billion. Sierra, which is valued at $43.50 a share in the transaction, jumped 15.8% to end at $41.57.

Another big arrangement will see acquisitive buyout firm Kohlberg Kravis Roberts take over Dollar General (DG Quote) for $7 billion, before the assumption of debt. Shares of Dollar General surged 25.6% to close at $21.07.

Elsewhere, Ford (F Quote) confirmed that it will sell its Aston Martin business in a deal that values the brand at $925 million. Ford will retain a $77 million stake in the business. The automaker's shares eased 11 cents, or 1.4%, at $7.82.

As for earnings, video-game maker Take-Two (TTWO Quote) posted a narrower-than-expected fiscal first-quarter loss. Earnings and revenue for the quarter topped the Thomson First Call consensus. Still, the stock reversed earlier strength and finished down 20 cents, or 1%, at $20.07.

Among analyst moves, UBS downgraded embattled New Century Financial (NEW Quote) to reduce from neutral. The firm joins those who believe New Century will be forced to declare bankruptcy.

Shares of New Century, which started the year at $31.59, were halted for the session at $3.21 on the NYSE as the exchange reviewed the situation.

UBS also upgraded retailers Kohl's (KSS Quote) and J.C. Penney (JCP Quote) to buy from neutral. Kohl's was 0.3% higher, and J.C. Penney gained 1.5%.

Away from stocks, commodity prices were weaker. Energy was on the decline, with oil slipping $1.14 to finish at $58.91 a barrel. Natural gas fell 17 cents to $6.91 per million British thermal units. Gold gave back $1.70 at $650.30 an ounce.

Treasury prices edged higher in the absence of any economic releases. The 10-year note was up 10/32 in price, yielding 4.55%, and the 30-year bond was adding 17/32 to yield 4.69%.

Overseas, Tokyo's Nikkei was up 0.8% at 17,292, and Hong Kong's Hang Seng rose 1.6% to 19,442. London's FTSE 100 and Frankfurt's Xetra DAX were each lower by about 0.1%.